How Tight are Oil Markets?

From Dow Jone's Tommorow's News Today (Sept. 15th)

"Refiners Don’t Want More Oil

With oil prices above $65 a barrel, OPEC needs no prompting
to produce all the crude it can sell.

Therein lies the problem: there is no demand for additional
OPEC oil. Despite spirited calls for the producers’ group to
open its taps - led by beleaguered U.K. Chancellor of the
Exchequer Gordon Brown, under domestic pressure for high
gasoline prices - OPEC may have trouble unloading the 30 million
barrels a day it is pumping now.

If the results of Wednesday’s sale of crude oil from the U.S.
Strategic Petroleum Reserve are any guide, U.S. refiners are far
from desperate for supply even with more than 840,000 barrels
a day of domestic crude production still off line in the Gulf of
Mexico after Hurricane Katrina blew through the heart of the
country’s most prolific oil region.

Only 11 million barrels of crude of the 30 million on offer
was awarded in the sale, part of a total 60 million barrels of
crude and refined products made available to the market by
members of the 26-nation International Energy Agency. The
government rejected bids it considered too low for a further 7.2
million barrels.

And only 3.35 million barrels of SPR crude, less than a
third of the 12.6 million barrels the U.S. Department of Energy
agreed two weeks ago to loan refiners in a separate release,
actually has been delivered or is scheduled to be delivered, a
department spokesman said Thursday.

“The low SPR sale only reinforced OPEC’s assertion that
this is a refining problem and not a crude problem,” said Yasser
Elguindi, managing director at Medley Global Advisors.
BP PLC (BP) is reassessing its needs before arranging
delivery of the 2 million barrels of low-sulfur crude it asked to
borrow from the SPR on Sept. 2, a spokesman said."




Timothy Burger
timothyb(at)timothyburger.com

We Don't Get What We Pay For

The Kansas City Star ran an article about a new OECD study on education this morning. There isn't a lot of new news in the article, but it bear repeating that the state of education in the US is a serious issue. Education needs more than just more money, it needs real reform.

From the article:

"McGaw said that the United States remains atop the "knowledge economy," one that uses information to produce economic benefits. But, he said, "education's contribution to that economy is weakening, and you ought to be worrying."

The report bases its conclusions about achievement mainly on international test scores released last December. They show that compared with their peers in Europe, Asia and elsewhere, 15-year-olds in the United States are below average in applying math skills to real-life tasks."

"Given what the United States spends on education, its relatively low student achievement through high school shows its school system is "clearly inefficient," McGaw said.

In all levels of education, the United States spends $11,152 per student. That's the second highest amount, behind the $11,334 spent by Switzerland."

Education, and an exceptionally well educated population are the key to maintaining the standard of living in the US. The strength, or weakness, of our education system will be one of the keys to maintaining the lifestyles we have come to expect.

Timothy Burger
timothyb(at)timothyburger.com

Jayhawks on Wall Street

Last week I had the opportunity to travel to New York City with a group of MBA students from the University of Kansas. The purpose of the trip was to raise KU's profile in New York. The trip included breakfast, a tour, and time on the floor with a specialist at the New York Stock Exchange, hence the picture above. The NYSE doesn't want people taking pictures inside the exchange, so I don't have any pictures from the floor of the exchange, only from the visitor's gallery.

The trip went well for everyone. The personal highlight was the opportunity to interview with a top-tier investment bank. This was only an initial interview, but I think it went well.

KU has done a lot of work to develop a high quality business school, and a great finance program. The school is now gearing up to do more work to get our graduates in front of top employers and improve the public profile of the school.

Timothy Burger
timothyb(at)timothyburger.com